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| VISION |
Eckes-Gran
ini G
rou
p A
NN
UA
L REPO
RT 2006
| Brand quality that bears fruit | ANNUAL REPORT 2006
Leading European fruit juice and fruit beverage
company, based on strong Number 1 / Number 2
brands, with an excellent reputation for
successful innovations.
Profitable and sustainable growth, via organic
growth and acquisitions, mainly in Europe.
With a motivated and competent team in a very
attractive company characterized by an open
and entrepreneurial culture.
Leading European fruit juice and fruit beverage
company, based on strong Number 1 / Number 2
brands, with an excellent reputation for
successful innovations.
Profitable and sustainable growth, via organic
growth and acquisitions, mainly in Europe.
With a motivated and competent team in a very
attractive company characterized by an open
and entrepreneurial culture.
| VISION |
Eckes-Gran
ini G
rou
p A
NN
UA
L REPO
RT 2006
| Brand quality that bears fruit | ANNUAL REPORT 2006
Leading European fruit juice and fruit beverage
company, based on strong Number 1 / Number 2
brands, with an excellent reputation for
successful innovations.
Profitable and sustainable growth, via organic
growth and acquisitions, mainly in Europe.
With a motivated and competent team in a very
attractive company characterized by an open
and entrepreneurial culture.
Leading European fruit juice and fruit beverage
company, based on strong Number 1 / Number 2
brands, with an excellent reputation for
successful innovations.
Profitable and sustainable growth, via organic
growth and acquisitions, mainly in Europe.
With a motivated and competent team in a very
attractive company characterized by an open
and entrepreneurial culture.
Eckes & Stock Group
| Corporate Boards |
Advisory Board of Eckes-Granini GmbH & Co. KG (until November 30, 2006)
Peter Thiel Chairman
Hermann Arnold Deputy Chairman
Dr. Ottokarl Finsterwalder
Volker Stühmeier
Board of Supervisors of Eckes AG
Peter Thiel Chairman
Stefan Kobold Deputy Chairman
Dr. Karl Brings
Dr. Hans Falk-Bjerke
Axel Hamm
Bernard Huber
Management Board of the Eckes-Granini Group GmbH*
Thomas Hinderer Chairman
Sidney Coffeng Marketing, R&D, Export and PR
Heribert Gathof General Manager Eckes-Granini Germany
Albert Grätz Finance, Controlling, M&A
Sabine Holtkamp Human Resources, Organizational Development
Sylvain Jungfer General Manager Eckes-Granini France
Dr. Peter Nagel Supply Chain
* Eckes-Granini GmbH & Co. KG was formally reconstituted as the Eckes-Granini Group GmbH effective January 30, 2007.
All key figures for business year 2006 cited in the Annual Report relate to Eckes-Granini GmbH & Co. KG.
National organizations National organizations
Eckes AG
Eckes-Granini Group
Eckes-Granini Deutschland GmbH Nieder-Olm / Germany
Oy Marli AB Turku / Finland
Eckes-Granini France SNC Sarre-Union / France
Eckes-Granini Austria GmbH Kröllendorf / Austria
OOO Eckes-Granini Rus Moscow / Russia
Eckes-Granini Ibérica S. A. Barcelona / Spain 51 %
Eckes-Granini Suisse S. A. Henniez / Switzerland 51 %
SIÓ-Eckes Kft. Siófok / Hungary
Eckes-Granini Romania S.R.L. Bucharest / Romania
UAB Elmenhorster Vilnius Vilnius / Lithuania
100 % interest unless otherwise indicated.
| Key figures |
| National organizations |
2005 2006 Diff.
Volume sales in million litres 896 1,067 +19.2 %
– of which fruit beverages (core business) 896 978 +9.1 %
Net turnover in million EUR 718 818 +13.9 %
– of which fruit beverages (core business) 718 802 +11.7 %
Earnings before interest and taxes (Ebit) in million EUR 43.6 37.0 -15.2 %
Employees* 1,487 1,457
* Full-time equivalent
Publisher
Eckes-Granini Group GmbH*
| * Eckes-Granini GmbH & Co. KG was formally reconstituted as the
Eckes-Granini Group GmbH effective January 30, 2007.
All key figures for business year 2006 cited in the Annual Report
relate to Eckes-Granini GmbH & Co. KG.
Main Office
Ludwig-Eckes-Allee 6
55268 Nieder-Olm, Germany
Telephone: +49 (0) 61 36 / 35 05
Telefax: +49 (0) 61 36 / 35 10 81
E-mail: [email protected]
Contact
Engel & Zimmermann AG,
Agentur für Wirtschaftskommunikation, Gauting
Telephone: +49 (0) 89 / 89 35 63-3
Telefax: +49 (0) 89 / 89 39 84 29
E-mail: [email protected]
Concept
Engel & Zimmermann AG,
Agentur für Wirtschaftskommunikation, Gauting
Design und Realisation
Welcome Marketing GmbH, Schondorf am Ammersee
Photo Credits
Eckes-Granini Archive
Jan Greune, Münsing
Karl Newedel
Getty Images
This Annual Report is also available in German.
Dieser Geschäftsbericht ist ebenfalls in deutsch erhältlich.
.
| Publishing Data |
Eckes & Stock Group
| Corporate Boards |
Advisory Board of Eckes-Granini GmbH & Co. KG (until November 30, 2006)
Peter Thiel Chairman
Hermann Arnold Deputy Chairman
Dr. Ottokarl Finsterwalder
Volker Stühmeier
Board of Supervisors of Eckes AG
Peter Thiel Chairman
Stefan Kobold Deputy Chairman
Dr. Karl Brings
Dr. Hans Falk-Bjerke
Axel Hamm
Bernard Huber
Management Board of the Eckes-Granini Group GmbH*
Thomas Hinderer Chairman
Sidney Coffeng Marketing, R&D, Export and PR
Heribert Gathof General Manager Eckes-Granini Germany
Albert Grätz Finance, Controlling, M&A
Sabine Holtkamp Human Resources, Organizational Development
Sylvain Jungfer General Manager Eckes-Granini France
Dr. Peter Nagel Supply Chain
* Eckes-Granini GmbH & Co. KG was formally reconstituted as the Eckes-Granini Group GmbH effective January 30, 2007.
All key figures for business year 2006 cited in the Annual Report relate to Eckes-Granini GmbH & Co. KG.
National organizations National organizations
Eckes AG
Eckes-Granini Group
Eckes-Granini Deutschland GmbH Nieder-Olm / Germany
Oy Marli AB Turku / Finland
Eckes-Granini France SNC Sarre-Union / France
Eckes-Granini Austria GmbH Kröllendorf / Austria
OOO Eckes-Granini Rus Moscow / Russia
Eckes-Granini Ibérica S. A. Barcelona / Spain 51 %
Eckes-Granini Suisse S. A. Henniez / Switzerland 51 %
SIÓ-Eckes Kft. Siófok / Hungary
Eckes-Granini Romania S.R.L. Bucharest / Romania
UAB Elmenhorster Vilnius Vilnius / Lithuania
100 % interest unless otherwise indicated.
| Key figures |
| National organizations |
2005 2006 Diff.
Volume sales in million litres 896 1,067 +19.2 %
– of which fruit beverages (core business) 896 978 +9.1 %
Net turnover in million EUR 718 818 +13.9 %
– of which fruit beverages (core business) 718 802 +11.7 %
Earnings before interest and taxes (Ebit) in million EUR 43.6 37.0 -15.2 %
Employees* 1,487 1,457
* Full-time equivalent
Publisher
Eckes-Granini Group GmbH*
| * Eckes-Granini GmbH & Co. KG was formally reconstituted as the
Eckes-Granini Group GmbH effective January 30, 2007.
All key figures for business year 2006 cited in the Annual Report
relate to Eckes-Granini GmbH & Co. KG.
Main Office
Ludwig-Eckes-Allee 6
55268 Nieder-Olm, Germany
Telephone: +49 (0) 61 36 / 35 05
Telefax: +49 (0) 61 36 / 35 10 81
E-mail: [email protected]
Contact
Engel & Zimmermann AG,
Agentur für Wirtschaftskommunikation, Gauting
Telephone: +49 (0) 89 / 89 35 63-3
Telefax: +49 (0) 89 / 89 39 84 29
E-mail: [email protected]
Concept
Engel & Zimmermann AG,
Agentur für Wirtschaftskommunikation, Gauting
Design und Realisation
Welcome Marketing GmbH, Schondorf am Ammersee
Photo Credits
Eckes-Granini Archive
Jan Greune, Münsing
Karl Newedel
Getty Images
This Annual Report is also available in German.
Dieser Geschäftsbericht ist ebenfalls in deutsch erhältlich.
.
| Publishing Data |
21. Foreword
195. Brand Philosophy
73. Business Year 2006
24
26
27
28
30
32
33
34
35
36
37
Overview
Finland
Lithuania & Baltic Region
France
Germany
Austria
Hungary
Romania
Russia
Spain
Switzerland
40 8. Internet, Publishing Data
246. Our Countries
38
7. Key Business Figures,
Commentary
52. Corporate Portrait
154. Leadership for Success
An Interview with Thomas Hinderer
| Contents |
Rising raw material prices and moderate growth in
overall consumption, marked by declines in some
segments, had a significant impact on the European
fruit juice market in 2006. In view of this situation,
we are particularly proud to note that the Eckes-
Granini Group succeeded in setting itself apart from
the general market trend and recording a “juicy
plus”. We ended the past business year with double-
digit gains in both turnover and volume sales while
strengthening our position as a leading European
producer of branded fruit beverages once again.
Eckes-Granini is an intact, financially sound company
that is now moving dynamically toward the billion-
euro mark in turnover from sales of strong inter-
national and local brands. Despite a difficult market
environment, we have increased investments in our
brands substantially in order to strengthen them on
a sustained basis over the long term. We provided
impetus to growth by introducing new products and
entering new market segments once again in 2006.
In addition to strong organic growth powered by our
strategic brands, we also continued to pursue our
policy of European expansion with the acquisition of
Elmenhorster in Lithuania and the establishment of an
Eckes-Granini subsidiary in Romania.
As the financial holding company of the Eckes-Granini
Group, the Eckes AG took several far-reaching deci-
sions during the past year – decisions that will guide
and shape our course toward the future. Following
the sale of the German spirits division, the company
will now focus more rigorously on the non-alcoholic
beverage business. Following the acquisition of the
outstanding 26 % interest in Eckes-Granini held by
Melitta until November 2006, the Eckes-Granini Group
| Eckes-Granini: a juicy plus |
2 Foreword
From left to right: Heribert Gathof, Albert Grätz, Sidney Coffeng, Thomas Hinderer, Sylvain Jungfer, Sabine Holtkamp, Dr. Peter Nagel
3Foreword
now has full control and decision-making authority in
all business matters. These decisions represent both
an affirmation and an obligation for us. We intend to
take advantage of the resulting freedom and the op-
portunities it offers to strengthen our market position
substantially through internal and external growth.
Moving ahead towards realization of our Vision 2010,
we established a solid foundation for success during
the past business year, to which our employees
contributed significantly with their commitment
and hard work. We wish to thank each and every
member of our staff for their achievements in 2006.
As we face the tasks and challenges of the future, we
know that we can rely on a strong, highly motivated
Eckes-Granini team that contributes a wealth of skills
and knowledge within the context of multinational
cooperation and thus forms the basis for sustained
business success.
Management Board
Eckes-Granini Group
As a major beverage producer and a brand supplier
with a strong tradition, the Eckes-Granini Group,
based in Nieder-Olm near Mainz (Rhineland-Palati-
nate), holds a leading position in the European fruit
beverage market.
The foundation for international success was laid
in the early 1990s as the borders to Eastern Europe
opened. The company, which has operated under the
name Eckes-Granini Group GmbH (formerly Eckes-
Granini GmbH & Co. KG) since January 30, 2007, is
represented by national organizations in ten European
countries. With its own management and supervisory
boards, Eckes-Granini is a fully independent inter-
national corporate group within the Eckes AG and
currently employs 1,500 people. “Growing closer and
growing together” is the motto of the international
team. The potentials and synergy effects needed to
achieve that goal are developed through consistent
expansion of an efficient corporate network.
5Corporate Portrait
Strong brands:
international stars and local heroes
Enjoyment and good health, innovation and tradition –
these are the ideas to which the staff of Eckes-Granini
has devoted itself from the outset. The Eckes-Granini
Group has established a broad European presence in
both the retail food trade and the out-of-home sector
with the internationally renowned granini and hohes C
brands as well as such strong national labels as Joker,
Réa, SIÓ and Marli. Superior quality is the top priority
in the Eckes-Granini Group, from carefully selected
fruits and raw materials via the gentle production
process to the finished product. The company’s entre-
preneurial orientation and self-image as a brand pro-
ducer are the cornerstones of this quality philosophy.
Consumers in more than 70 countries have come
to appreciate the juices, fruity thirst-quenchers and
refreshing beverages produced by the Eckes-Granini
Group. The factors that have contributed most to the
success of Eckes-Granini brands are unique position-
ing, sustained advertising support and outstanding
product quality.
| Leading European producer
of branded fruit beverages |
7Business Year 2006
| On course for success again in 2006 |
The market: moderate growth in Europe
The European fruit beverage market showed mode-
rate growth in 2006. Excluding the Russian market,
which recorded double-digit volume growth rates,
the overall market suffered slight volume sales losses.
While a number of Western European markets were
stagnant or experienced declining sales, the markets
of Eastern Europe showed strong growth.
The market for fruit beverages (data from seven core
countries, retail food trade) declined slightly, with vol-
umes down 1.5 %. The positive trends in the French,
Spanish and Hungarian markets were opposed by
slumping volume sales in the important German mar-
ket as well as in Austria and Finland. The Swiss market
remained stable at the level of the preceding year.
Market developments in 2006 were also influenced
by substantial increases in raw material prices.
In the highly competitive European market, “A”
brands and trade labels made further gains at the
expense of “B” brands. A close look at the trade
landscape reveals that discounters continued to
strengthen their foothold in Europe.
Double-digit growth for Eckes-Granini
In spite of a difficult market environment and declining
sales in certain areas, 2006 was an extraordinarily
positive business year for the Eckes-Granini Group. Net
turnover from sales in the core fruit beverage business
rose markedly by 11.7 % to EUR 802 million (2005:
EUR 718 million). Including sales of water in Hungary,
net turnover for 2006 came to a total of roughly EUR
818 million*. This enabled the Group to improve its po-
sition as a leading European producer of branded fruit
beverages with a value-based market share of 13.7 %
(data from seven core countries, retail food trade).
With volume sales of 978 million litres of fruit bever-
ages, the company raised its rate of growth in its core
business field by 9 % (2005: 896 million litres).
If the 90 million litres of bottled water sold under the
cooperative distribution agreement with Szentkirályi
Water (Hungary) are included, total volume comes to
1,067 million litres* – surpassing the one-billion-litre
mark for the first time.
Nearly all national organizations succeeded in in-
creasing volume sales as compared to 2005.
The largest contributors to volume growth were
Germany (+12.4 %) and Russia (+65.7 %).
| * Since revenues from cooperative water distribution operations
in Hungary were not included in the balance sheet until 2006,
no direct reference figures are available for 2005.
January 1. Two strong French
brands begin anniversary years:
Joker celebrates its 70th birth-
day, Réa its 50th.
February 1. In a logical step
in keeping with the new
management philosophy
and corporate structure, the
Management Board of the
Eckes-Granini Group is ex-
panded to include the general
managers of the two most
important national organiza-
tions, Germany and France.
Strategic brands continue to drive growth
International and local strategic brands* marketed
by the Eckes-Granini Group in both the retail food
trade and the out-of-home sector continued to drive
growth in 2006. The two international brands – granini
(+33 million litres) and hohes C (+19 million litres) –
were the largest contributors to total volume growth of
82 million litres (core business fruit beverages). Among
the strongest-growing local brands during the past
business year were Uslada in Russia (+18 million litres)
and Marli in Finland (+7 million litres).
| * The group of strategic brands includes the two international
brands granini and hohes C as well as the strong local brands
FruchtTiger (Germany and Austria), Réa and Joker (France), Marli
(Finland and Estonia), Mehukatti (Finland), SIÓ (Hungary), Uslada
(Russia), Elmenhorster (Lithuania) and YO Syrup (Austria).
8 Business Year 2006
April 20. The new PET bott-
ling line in Bröl is commis-
sioned, thus doubling bottling
capacities for this strategically
important packaging unit
in Germany.
May 1. SIÓ-Eckes (Hungary)
acquires exclusive distribution
rights for Szentkirályi water –
a promising alliance of two
Hungarian market leaders.
May 10. The third European
Convention held since 2001
is attended by 160 employees
from all national organizations.
The three-day event was de-
voted primarily to introducing
the Group’s new strategy and
management philosophy.
| Important Events in 2006 |
9Business Year 2006
Since June. Group-wide
implementation of new pro-
cesses and modified structures
designed to enhance effi-
ciency and innovative drive,
optimize costs and strengthen
international cooperation and
networking among national
organizations.
June 1. The Eckes-Granini
Group acquires the Lithuanian
market leader UAB Elmen-
horster – thereby significantly
strengthening its market
position in the Baltic region.
June 8. An important
growth market in Europe:
The newly founded subsidiary
Eckes-Granini Romania begins
marketing granini in Romania
in cooperation with Carlsrom
Beverage Co.
November 7. Following the
sale of the German spirits divi-
sion, Eckes AG strengthened
its focus on the fruit beverage
business represented by the
Eckes-Granini Group.
November 14. Production is
launched on the new PET line
in Mâcon (France).
November 30. Eckes pur-
chases shares of Eckes-Granini
GmbH & Co. KG held by
Melitta (26% interest) since
the buyout of granini in 1994,
thus giving the Eckes-Granini
Group full control and
decision-making authority
in all business matters.
More funds for advertising despite
increased costs
With earnings before interest and taxes (EbIT) of EUR
37 million, the company achieved a gratifying result,
which nevertheless remained as expected below the
record earnings of 2005 (EUR 43.6 million)
(see graphic page 10).
One of the primary reasons for the decline in earnings
from the level of the preceding year was the signifi-
cant rise in prices for raw materials in general and
especially for orange juice concentrate, which could
not be passed on to the market in full.
Despite this difficult market environment, the Eckes-
Granini Group stepped up its marketing activities once
again during the past business year. With an eye to
strengthening the company’s brands in the long term
and achieving sustained earnings growth, investments
in brands were increased significantly in 2006. This
was reflected above all in markedly higher (+15 %)
investments in consumer communication, including TV
advertising in particular. The launches of hohes C Red
Multivitamin in Germany, Austria and Hungary were
effectively supported with TV commercials and flank-
ing measures, to cite only one example.
The extraordinary income reflected in the earnings
figure for 2005 could not be matched in 2006.
One-time extraordinary expenditures for restructuring
measures, among other things, impacted on earnings
in 2006.
Taking this into consideration, earnings from ordinary
business operation in 2006 remained comparable to
those of the preceding year.
10 Business Year 2006
Further progress in Europeanization
The European expansion process continued with the ad-
dition of two new companies in Lithuania and Romania.
The acquisition of UAB Elmenhorster, the market leader
in Lithuania, enables Eckes-Granini to strengthen its
position in the Baltic region substantially.
In Romania, an important growth market in Eastern
Europe, the newly founded subsidiary Eckes-Granini
Romania commenced marketing operations for granini
in cooperation with Carlsrom Beverage Co..
With these additions, the number of national organi-
zations in the Eckes-Granini Group rose to 10.
The strategic partnership with Fructa Napoje in Poland
was expanded. In May 2006, Fructa Napoje assumed
responsibility for production and distribution of the
Clippo brand in Poland.
New products enliven the market
Eckes-Granini provided significant impulses for growth
with numerous innovations once again during the past
business year.
Earnings before interest and taxes
(EblT) in million EUR
2001 2002 2003 2004
23.7
25.6
37.4
35.8
2005
43.6
2006
37.0
Investments in
consumer communication
2005 2006
+15 %
11Business Year 2006
The hohes C line was extended through the successful
launch of Red Multivitamin in several countries.
The Eckes-Granini Group expanded its leading role
as a supplier of fruit beverages in modern PET bottles.
Following the conversion of numerous brands from
glass to PET in multiple national markets in 2005,
the Joker brand was relaunched in the convenient
PET bottle in late 2006. PET activities were initiated
in Spain with the introduction of granini in large
1.5-litre PET bottles, and the PET business of granini
was extended in Germany.
With the launches of FruchtTiger Sport (Germany),
FruchtTiger Cubito (Germany), the new, attractive
0.2-litre single-portion carton with twist-off cap and
straw, a new variety of SIÓ Vitatigris (Hungary), Mehu-
katti ready-to-drink (Finland) and Réa Réveil Douceur
(France), Eckes-Granini continued to strengthen its
position in the market for children’s beverages.
PET: Strategic expansion of production capacities
The Group’s dual production strategy – a combination
of in-house production and co-packing by strategic
external partners – proved highly effective once again
in 2006. The efficient supply-chain network enabled
Eckes-Granini to ensure timely delivery, superior pro-
duct quality and cost-efficiency.
The integration of UAB Elmenhorster (Lithuania),
significant volume sales growth and changing market
requirements posed new challenges with respect to
production processes and procedures. In addition to
several new carton-packaging lines, cold-aseptic PET
bottling lines were commissioned in Bröl (Germany)
and Mâcon (France) in order to increase capacities in
response to rising demand. Eckes-Granini also under-
scored its role as the technology leader in the industry
with the installation of a Plasmax plastic bottle barrier
coating system in Henniez (Switzerland).
Evolution in management
“Creating a vital culture of leadership and entrepre-
neurial spirit by empowering people and organiza-
tion”: The adoption of this clear credo by our manag-
ers in Vision 2010 was but one of the major highlights
of the year 2006.
Other frequently cited highlights included the Euro-
pean Convention and changes in corporate structures
and processes.
The new management style not only emphasizes pro-
fessional qualities but also focuses on entrepreneurial
spirit and social skills. Business and human relations,
finance and the interpersonal sphere – the one side
will no longer exist without the other in future. The
Convention slogan “We do it together” means not
only “what” we do but above all “how” we do it.
Sensitivity to others, a constructive approach to
conflicts, the ability to listen to different views and a
culture of feedback are the qualities needed in order
to achieve outstanding results. The objective is to
develop a basis of teamwork and cooperation that
promotes motivation, trust and progress. A close-
knit international network, reduced complexity and
enhanced efficiency, as well as a stronger focus on
the future business needs, will be required to meet
the challenges of the future.
In this context, change processes were facilitated,
existing programmes and systems adapted wherever
necessary and new tools, such as Leadership Feed-
back and an organizational analysis, introduced as
we made further progress on our way to becoming
a learning organization.
| Outlook: developing new growth segments |
12 Business Year 2006
Analysts anticipate stagnating fruit beverage markets
in the core countries served by the Eckes-Granini
Group – with the exception of Russia – in 2007.
Conditions affecting business are expected to remain
difficult, due in large measure to rising raw material
prices. Thus further price adjustments are likely in
the fruit beverage market.
The Eckes-Granini Group expects to achieve moderate
growth in fruit beverage business in 2007. Further
increases in brand investments will contribute to en-
suring sustained, long-term gains in company value.
Another focus for Eckes-Granini in 2007 is the
development of additional potentials in the growing
“thirst-quencher / refreshment” and “chilled juice”
segments.
In the thirst-quencher / refreshment segment, the
Group has now supplemented the successfully estab-
lished Marli Juissi, granini Frucht Prickler and granini
Fruchtig-Frisch brands with a new trend concept –
hohes C Naturelle. This thirst-quenching combination
of natural, non-carbonated mineral water and pure
fruit juice responds to the trend in favour of “natural,
refreshing beverages”.
13Business Year 2006
97 98 99 00 01 02 03 04 05 06
Turnover 1997 – 2006 in million EUR*
1.000
900
800
700
600
500
400
300
200
100
97 98 99 00 01 02 03 04 05 06
| *Base: core business (fruit beverages)
Volume sales 1997 – 2006 in million litres*
1.000
900
800
700
600
500
400
300
200
100
| *Base: core business (fruit beverages)
Eckes-Granini meets the rising demand for fresh,
chilled fruit juices with products developed specifically
for the chilled products section. The company took
its first steps into this growing segment in mid-2006
with the launch of Joker Vital and Joker Vital 5 in the
French market. Fresh, chilled juices from Eckes-Granini
will be introduced in several European countries under
the concept granini Sun Fresh in 2007.
The partnership with Gutta in Russia established
several years ago was placed on a firm footing for the
medium term in 2007. Gutta and Eckes-Granini Rus
have agreed to cooperate closely in production and
sales, thereby enabling both companies to tap the
strong growth potential even more effectively
in the years to come.
In addition to promoting organic growth, plans call
for entry into new growth markets through acquisi-
tions and strategic alliances.
14 Interview
| Leadership for Success |AN INTERVIEW WITH THOMAS HINDERER
Mr. Hinderer, 2006 was another banner year for
the Eckes-Granini Group. Does that mean that
the bar is set even higher for the coming years?
Thomas Hinderer: The Management Board has de-
scribed quite clearly where we intend to be in three
years. Our primary goal is to increase company value
significantly and on a sustained basis. Expressed in
quantitative terms, we want the value of the Eckes-
Granini Group to be 50 percent higher in 2010 than
in 2005 – which means that we must find ways to
increase profits with the same structures and under
comparable raw material and currency conditions.
What pleases me most is that we have articulated
these ambitious goals and strategies together within
the management team. This underscores the impor-
tance of the decision taken in 2006 to include the
general managers from Germany and France – the
two largest national organizations, which together
account for 60 percent of total revenue and earn-
ings – in the Management Board of the Eckes-Grani-
ni Group, where they are now fully integrated and
involved in the Board’s most important decisions.
15Leadership for Success
A NEW TEAM CULTURE AT ECKES-GRANINI:
“COOPERATION WITHIN THE NETWORK AND SHARED RESPONSIBILITY.”
And you expect this team spirit to spread
throughout the entire company?
Thomas Hinderer: That is our idea of modern leader-
ship and modern management: emphasizing the
achievements of the group rather than the individual.
The pillars of our new team culture are cooperation
with the network and shared responsibility. The whole
organization is more than the sum of its parts – our
excellent employees. We have established a broad
basis for communication and dialogue in order to
ensure that every employee at Eckes-Granini truly has
the opportunity to contribute to enhancing the value
of our company. With the General Managers’ Meet-
ings, the European Management Convention, frequent
meetings involving all departments and work in inter-
departmental, international groups, we have estab-
lished important platforms from which to promote and
intensify dialogue beyond all national and departmen-
tal boundaries and at all levels of the company.
In order to make the best possible use of the extensive
skills and know-how in our group, we need intelligent
networks and an open, transparent culture in which
16 Leadership for Success
leadership can be relied upon and in which people
are willing to assume responsibility because it is in their
own interest to do so. Of course you can’t create such
a culture by directive – like flipping a switch. Build-
ing a common culture of change in which change is
viewed as opportunity is a process that takes time and
patience, a process that thrives on dialogue and dis-
cussion devoted to achieving consensus. Courage and
entrepreneurial thinking and action are values
that are expressly desired and fostered.
You emphasize transparency.
How important is transparency in your view?
Thomas Hinderer: Transparency is an important
part of our new leadership philosophy. I believe that
knowledge and transparency form the foundation for
management and leadership, the basis for open feed-
back and thus for mutual trust as well. Furthermore,
I am convinced that you can’t manage effectively
what you don’t measure. And that is why we have
implemented a new, transparent reporting system
that ensures comparability among all national
organizations.
We firmly believe that good leadership is the basis
for successful corporate growth. With this in mind,
we have defined a number of management com-
petencies that we view as prerequisites for effective
corporate management. These management compe-
tencies serve as a basis for feedback and continuous
improvement of our managers as we gradually evolve
into a learning organization. This is clear evidence
that we do practice what we preach, or “walk the
talk”, as people often say.
I am confident that we will achieve our ambitious
goal because I have seldom witnessed the kind of
motivation and commitment we recognize in people
at Eckes-Granini. That is truly in a class of its own.
One of those ambitious goals is to increase
company value. How is that goal to be achieved?
Thomas Hinderer: An increase in company
value comes primarily from continuous earnings
growth and secondly from what we invest in our
brands. What counts is not short-term success but
rather sustained growth. Thus it is essential that we
have healthy, well-known, profitable brands, that we
invest enough in our brands, that we lead rather than
follow when it comes to innovation and, of course,
that we have a strong balance sheet and profit and
loss structure coupled with a competitive cost
structure. Expressed in simple terms, our corporate
strategy concentrates on six focus areas: net prices,
innovation, fixed costs, complexity, purchasing and
people management. We must and will continue
to do our homework in these areas.
What direction do you expect new product
developments to take?
Thomas Hinderer: Trends such as health and con-
venience as well as aspects of quality and pleasure will
continue to play a very important role. The important
thing is to introduce only products that come from our
brands and strengthen our brands. It makes no sense
to innovate just for the sake of innovation. Instead,
we aim to take advantage of the strengths of granini,
hohes C, Joker, Réa, SIÓ and Marli and to develop
them intelligently in order to attract new consumers
for our brands. This will involve placing new products
like granini Sun Fresh in refrigerated sections or bene-
fiting from the strong potential of the thirst-quencher
and refreshment segments with hohes C Naturelle and
granini Frucht Prickler. The point is to pursue a sound,
efficient brand policy.
Are discounters going to spoil your plans?
Thomas Hinderer: The fact is that private labels,
trade brands, low-priced and discounter products,
etcetera, account for 60 percent of our markets. This
may be frightening to some people. But I see it as a
challenge and an opportunity. Our advantages are our
strong brands and our good brand policy, which is in
tune with the times and generates innovations. With
good products and intelligent concepts supported by
17Leadership for Success
the right kind of communication we have created an
excellent basis for differentiation. It is important for us
to apply effective concepts to other countries and to
take advantage of synergies. We operate internation-
ally, and thus it is essential to establish new products
not only in one but in several different countries. This
is precisely where our strength and our greatest po-
tential lie in competition with low-priced products.
The organization has achieved dynamic external
growth through acquisitions in the past.
Thomas Hinderer: And we will continue to do so in
future, but we want to ensure that we grow in our
existing markets as well, as in 2006, when nearly all
growth was organic. We are especially proud of that.
Our strategy calls for sustained internal and external
growth. In keeping with the Eckes-Granini philosophy,
we seek to acquire brands that fit with our portfolio,
established brands that already hold at least the
number 2 and preferably the number 1 position in
their respective countries. And the companies we ac-
quire must be integrated intelligently into our network.
As a leading European fruit juice and fruit bever-
ages producer, we are in constant contact with a
number of companies throughout Europe within the
framework of our expansion strategy as we explore
potential opportunities for cooperation.
| Eckes-Granini:
A passion for strong brands |
19Brand Philosophy
Dressing up nicely to visit the neighbours instead of
playing? Little Max has painted red spots on his face
with Mama’s lipstick. “I don’t think I can go with you”,
he says with mock sadness. His mother winks and
suggests that he’d better stay in his tree house and
recover instead. She gives him a bottle of hohes C Red
Multivitamin. And there in his tree house with Teddy,
Max really does feel much better!
As this short clip from the TV commercial “Get well
soon” broadcast in support of the market launch
of hohes C Red Multivitamin in 2006 clearly shows,
brands are more than just products. They appeal to
Strategic brands 84 %
824 million l
Local brands 36 %
355 million l
hohes C 24 %
230 million l
granini 24 %
239 million l
total 978 million l
| *Base: core business (fruit beverages)
Volume shares by brand in 2006 (figures rounded)*
the head and the heart at once. The quality of a
product must be beyond doubt, but brands also have
the power to trigger emotions. The story of Max and
his mother speaks of happiness, loving care, and
harmonious, intact relationships. Viewers sense that
hohes C and the family simply belong together.
Brands as success factors
Brands are personalities with their own unique iden-
tities. They are points of reference and sources of trust.
People buy brands because they associate them with
childhood memories, longings and dreams, and often
even a whole attitude toward life. Strong brands with
Other brands 16 %
154 million l
20 Brand Philosophy
prominent profiles are one of Eckes-Granini’s competi-
tive advantages. They are key factors in the company’s
success. The Group believes in its brands and relies
on them. They are the basis for sustained growth in
company value.
Eckes-Granini: a perfectly tuned brand portfolio
The success story of Eckes-Granini brands is closely re-
lated to a brand portfolio that is perfectly tuned to the
market and the needs of consumers. The combination
of international brands such as granini and hohes C
with so-called “local heroes” (Marli, Mehukatti, Joker,
Réa, SIÓ, YO Syrup, Uslada, FruchtTiger and Elmen-
horster) has made the company so successful.
This dual brand strategy, a mix of international and
local brands, is carefully designed to ensure that none
of the individual brands competes with the others.
Brands are clearly and distinctively positioned and
combined in keeping with the relevant dimensions
of the fruit beverage market – health (e.g. hohes C,
Joker) and pleasure / enjoyment of life (e.g. granini,
SIÓ). In this way, different consumer needs are fulfilled
precisely and in accordance with the dictates of the
market. The regional roots of our “local heroes” in
their home countries often play an important role in
brand identification and brand image.
The pillars of the Eckes-Granini brand philosophy
The positioning of our brands are as diverse as the
brands themselves. Yet what they all have in com-
mon is the consistent and brand-typical realization
of their respective positions in all elements of the
marketing mix and the sustained support provided
to all of our brands:
Superior product qualities respond to the specific
positions of given brands and the specific require-
ments of the respective segments. We regard
quality as a self-evident objective, in all sectors and
business fields, and especially in excellent practical
application.
Unique, typical brand features ranging from
packaging design to advertising to drinking
glasses. A brand like granini, for example,
is regarded in over 70 countries as the
very symbol of pleasure and enjoyment of
life. This premium brand is available internationally
through all sales channels – in supermarkets as well
as in top restaurants and exclusive hotels. The ty-
pical brand presentation in the famous dimple design
guarantees that consumers would always recognize
the bottle – and thus the product – even if they were
blindfolded. In the 0.2- or 1.0-litre bottle or served in
a glass in a restaurant – the dimples give granini its
unparalleled recognition factor.
The creation of brand worlds with which consumers
are happy to identify and which give brands their
unique character. SIÓ is an excellent example. The
success story of our Hungarian brand began in 1977.
The key to success? Strong local roots. SIÓ is the
brand Hungarians see as “their own” and with which
they identify closely.
Our brand philosophy relies on sustained, long-term
investments in our brands and the knowledge that
temporary, short-term success is not the only thing
that counts. In spite of difficult market conditions,
investments by the Eckes-Granini Group in consumer
communication rose by 15 % in 2006.
Maintaining the balance between continuity and
staying in tune with the times:
Continuity is essential to the success of a brand, but
it must be combined with a keen eye for changes
in consumer needs and sensitivity in the imple-
mentation of innovations. Successful, long-term,
strategically sound brand management begins with
the customer and is consistently pursued with the
consumer’s needs in mind.
This brand philosophy requires a certain degree of
closeness to consumers and an awareness of their
wishes and needs. For Eckes-Granini, that means
staying in tune with the times without sacrificing a
23Brand Philosophy
measure of brand continuity. The TV commercial for
hohes C Red Multivitamin is a good example.
The hohes C brand traditionally stands for family
and loving care. Yet the image of the family has
changed, as have approaches to child-raising as well.
There is more room for understanding in the modern
mother–child relationship. The mother goes along
with the child’s game and allows him a certain
amount of independence. Loving care also plays an
important role for modern mothers. With hohes C
Red Multivitamin, the mother fulfils her obligations as
a caring, protecting parent, while hohes C retains its
position as a healthy vitamin supplier for the whole
family. This is a mixture with which hohes C has held
its leading position in the market for non-alcoholic
fruit beverages for over 50 years.
TV advertising conveys brand messages
The TV commercial for hohes C Red Multivitamin
required a year to develop – from the initial idea to
the first shooting session. Every detail counts and
helps ensure that consumers recognize themselves in
the short episode and can identify with the characters.
Success has proven that Eckes-Granini chose the right
course. Within one year, hohes C Red Multivitamin
advanced to the position of the third strongest product
in the hohes C range, measured in terms of customer
reach. Surveys clearly indicate that the TV commercial
contributed to an outstanding level of product recog-
nition and conveyed the important brand messages
according to plan.
Setting a trend with PET
Brands need to be communicated through advertising,
yet daily contact between millions of consumers and
the product and its packaging also plays a crucial role
in brand communication. Shapes and designs, such as
the brown hohes C bottle, the typical granini dimples
or the rectangular Joker bottle, help brands stand
out on store shelves and make them recognizable at
a single glance. But brands must not ignore the spirit
of the times in their external appearance. They must
remain vitally alive. Eckes-Granini has consistently suc-
ceeded in maintaining the balance between preserva-
tion and change. Thus, for example, Eckes-Granini
has affirmed its role as a trend-setter in Europe with
the introduction of the convenient PET bottle for fruit
beverages – a strategy that consumers have rewarded
and one that has also boosted growth substantially.
The brand philosophy runs like a continuous thread
through all marketing measures and is also reflected
in the consistent, brand-conforming implementa-
tion of POS activities and promotions. A strong sales
organization ensures that the company’s products are
present everywhere and in just the right quantities –
from the wholesale food and beverage trade to restau-
rants and hotels to petrol station shops and kiosks.
Moving towards the future with
continuity and innovation
The examples cited above clearly show that all brands
marketed by the Eckes-Granini Group have their own
unique histories and their own unmistakable faces.
Despite the diversity of our brands, the basic pre-
requisite for success are the same for all:
A keen sense of consumers’ needs coupled with
precise, systematic market research as a basis for our
brand policy. A good balance of quality and innov-
ation, of new impulses, of staying in tune with the
times and preservation and strengthening of the brand
core is the foundation for the sound decisions made
by the Eckes-Granini Group.
And that creates new impulses for our brands.
Eckes-Granini will once again focus on two new
growth segments this year: chilled juices, with the
granini Sonnenfrisch / Sun Fresh / al Sol concept,
and non-carbonated thirst-quenchers, with the intro-
duction of hohes C Naturelle.
Finland
Russia
Germany
Austria
HungarySwitzerland
France
Spain
| Overview |
European markets grew only moderately in 2006,
while the market in our core countries (data from seven
core countries, retail food trade), declined slightly by
1.5 %. In spite of difficult market environments in
some countries, the Eckes-Granini Group succeeded
in achieving overall growth with its strong brands and
raising the value-based market share of the Group as
a whole to 13.7 % (data from seven core countries,
retail food trade). Our national organizations defended
and extended their number 1 and number 2 positions
in their local markets.
The Group also recorded dynamic growth in export
markets. Export volume sales increased by 19 % over
the preceding year. The largest contributor to export
growth was granini. Réa, hohes C, YO Syrup and SIÓ
also achieved gains over the previous year.
In order to improve strategic planning for export
activities and ensure more effective planning support,
a new international business division responsible for
coordinating all export activities was established in
October 2006.
Romania
Lithuania
24 Our Countries
Lithuania, Baltic Region
Russia
Austria
Switzerland
Hungary
Finland
Spain
France
Germany
25Our Countries
Contribution to turnover by country in 2006** (figures rounded)
| ** Base: core business (fruit beverages)
Germany hohes C, granini, FruchtTiger 13.1 % 1
France Joker, Réa, granini 12.9 % 2
Spain granini 10.3 % 2
Finland Marli, Mehukatti, granini 34.7 % 1
Hungary SIÓ, hohes C 24.7 % 1
Switzerland granini, hohes C 10.6 % 1
Austria YO Syrup, hohes C, FruchtTiger 10.4 % 2
Russia Uslada, granini developing market developing market
Romania granini developing market developing market
Lithuania Elmenhorster 23.7 % 1
| Source: leading market research institutes (Base: value sales retail trade)
Country Strategic brands Value-based market share Market position
1 %
2 %
4 %
4 %
5 %
7 %
8 %
27 %
35 %
Value-based market share*: 34.7 %
Strategic brands: Marli, Mehukatti, granini
New products / important events:
Marli Juissi Red Energy, Marli Vital syrup range,
Mehukatti ready-to-drink, granini 1.0-litre
carton range
26 Finland
OY MARLI AB: FOCUS ON STRATEGIC BRANDS CONTINUES TO PAY DIVIDENDS
| Finland |
Volume sales in the Finnish fruit beverage market
declined slightly by 1.0 %* in 2006, although the
extremely warm summer boosted syrup sales in
Finland by 1.6 %*.
Oy Marli AB once again recorded double-digit growth
driven by strategic brands (+19 %). The company’s
value-based market shares rose to 34.7 %* (fruit bever-
ages) and 35.3 %* (syrup), respectively. This gratifying
result was achieved by focusing on the strategic brands
– Marli, Mehukatti and granini – and boosting invest-
ments in TV and print advertising substantially.
Volume sales of the Marli brand rose by 20 %, and
the Marli Juissi, Marli Vital and Marli Natur lines contri-
buted significantly to overall growth. The most success-
ful innovations were Marli Juissi Red Energy and Marli
Vital syrups, the first syrup line with vitamin supple-
ments in the Finnish market. Highly popular among
families with small children in 2006 was the new
Mehukatti ready-to-drink concept in the 0.5-litre PET
bottle with sport cap and a 1.5-litre carton assortment.
Granini gained positive impulses from the launch of
the new 1.0-litre carton range.
The company has set its sights on continued growth
with numerous new products in 2007. The new
Marli Juissi fruit beverage line without added sugar is
expected to attract young consumers in particular. A
special syrup edition will be introduced in conjunction
with the thirtieth anniversary of the Mehukatti brand.
The most important innovation in the Mehukatti
portfolio will involve the consistent extension of the
ready-to-drink range through the addition of the prac-
tical 0.25-litre single-portion Cubito carton. Oy Marli
AB plans to strengthen and improve its market position
in the premium segment with the launch of the granini
Sun Fresh line of chilled juices.
| * retail food trade
27Lithuania & the Baltic Region
| Lithuania & the Baltic Region |
ECKES-GRANINI ACqUIRES THE MARKET LEADER IN LITHUANIA, STRENGTHENING ITS POSITION IN THE BALTIC REGION
The Baltic markets (Estonia, Latvia and Lithuania) for
fruit beverages showed strong growth in the range
of 7–10 % in 2006.
Business in the Baltic region was expanded substan-
tially with gains of 35 % in turnover and 19 % in
volumes sales, to which Estonia was the largest con-
tributor. Positive trends were also evident in Latvia and
Lithuania. These results were augmented by signifi-
cant increases in turnover and volume sales achieved
through the acquisition of the Lithuanian market
leader UAB Elmenhorster (June 2006), which clearly
strengthened our position in the Baltic region.
The most important product launch in the Baltic
countries in 2006 was the new granini line in 1.0-
litre cartons. Initiated concurrently in Estonia, Latvia
and Lithuania, the launch was supported by print ad
campaigns and promotions in the retail trade. The
presentation of the new flavour variety Marli Red Mul-
tivitamin resulted in volume sales gains in the 2-litre
range in Estonia. A similar concept was established for
the Elmenhorster brand in Lithuania in late 2006.
Value-based market share: 23.7 % (Lithuania)
Strategic brands:
Elmenhorster, Marli, granini
New products / important events:
granini 1.0-litre carton range, Marli Red Multi-
vitamin, Elmenhorster Red Multivitamin
Acquisition of UAB Elmenhorster, Lithuania
Activities in 2007 will focus on strengthening the
Elmenhorster brand in Lithuania with innovative con-
cepts and advertising support. Emphasis will be placed
in Estonia and Latvia on expanding innovative product
concepts for the Marli and Elmenhorster brands.
OY MARLI AB: FOCUS ON STRATEGIC BRANDS CONTINUES TO PAY DIVIDENDS
| Finland |
ECKES-GRANINI FRANCE SNC: SHARPER BRAND POSITIONING FOCUS – ON COURSE FOR THE FUTURE
| France |
Value-based market share*: 12.9 %
Strategic brands: Joker, Réa, granini
New products / important events:
Joker Vital, Joker Vital 5, Réa Réveil Douceur,
granini Orange-Maracuja and Orange-Carrot-
Lime, Joker Pulpéa Orange and Multivitamin
in the new 0.33-litre PET bottle
Launch of production on the new PET line
in Mâcon
Volume sales in the French fruit beverage market rose
by 2.9 %* in 2006, driven above all by strong growth
in sales of chilled juices as well as 1.5- and 2.0-litre
family-size containers.
Eckes-Granini France SNC profited from this general
growth trend and increased turnover sales with 10 %.
The company now holds a value-based market share
of 12.9 %*. The Joker and Réa brands occupy leading
market positions, which they were able to defend in
a highly competitive market.
Especially noteworthy accomplishments during the
past business year were the double-digit (+11 %)
gain in sales of Joker in the unique oval carton and
the entry into the chilled beverages segment with the
innovative Joker Vital and Joker Vital 5 concepts.
Joker Vital 5, a mix of five fruits that meets consum-
ers’ total daily vitamin requirements, reached many
new consumers within the first six months. This line
was selected for the “Saveur de l’année” award as
one of the best innovations of the year.
28 France
The major TV advertising campaign launched in 2006
will be extended in 2007. The objective is to under-
score the brand‘s promising position in the health seg-
ment and to strengthen Joker in the chilled beverages
segment on a sustained basis in 2007.
Réa introduced “Réveil Douceur” in a 2.0-litre carton
as a mild variety that is particularly attractive for
children. This course will be pursued in 2007 with the
rigorous repositioning of Réa as a children’s brand –
supported by a mascot created especially for this
purpose, a new package design and the conversion
of all juices to mild varieties.
Granini was extended through the addition of
two new flavours: Orange-Maracuja and Orange-
Carrot-Lime.
In the out-of-home sector, Eckes-Granini France SNC
strengthened its lead over competing producers, with
Joker as the number one brand. The acquisition of
new clients, including Air France and Club Méditer-
ranée, and the presentation of new products con-
tributed significantly to overall results. Turnover from
sales of Joker Pulpéa doubled over the preceding year
following the introduction of the 0.33-litre PET bottle
for the Orange and Multivitamin varieties.
One of the outstanding events of the past year was
the commissioning of the new PET line in Mâcon in
November 2006. By December, the first 1.0-litre
PET bottles of Joker were coming off the bottling line.
This was a milestone event, as the installation of this
system represents a major change of strategy in favour
of PET in place of glass bottles. In 2007, the company
plans to convert the direct juices of the Joker line as
well as the products in the granini range from glass
to convenient PET bottles.
| * retail food trade
ECKES-GRANINI FRANCE SNC: SHARPER BRAND POSITIONING FOCUS – ON COURSE FOR THE FUTURE
29France
30 Germany
ECKES-GRANINI DEUTSCHLAND GMBH: THE GERMAN MARKET LEADER PULLS AWAY
| Germany |
Value-based market share*: 13.1 %
Strategic brands:
hohes C, granini, FruchtTiger
New products / important events:
hohes C Red Multivitamin, granini Fruchtig-
Frisch Citrus-Mix, FruchtTiger Sport Apple-
Citrus, FruchtTiger Cubito, granini Cocktail
Basics range
Commissioning of the second cold-aseptic
PET bottling line
The German market for fruit beverages continued to
shrink in 2006, with volume sales down 3.7 %*. The
situation was accompanied by major structural chang-
es resulting from the progressive conversion from glass
to PET bottles and the trend toward one-way rather
than returnable packaging systems.
In contrast to this general negative trend, Eckes-
Granini Deutschland GmbH once again extended its
lead among brand producers with double-digit gains
in turnover and volume sales in 2006. The company’s
value-based market share rose to 13.1 %*. With these
outstanding results, the German national organization
made yet another significant contribution to the suc-
cess of the Eckes-Granini Group as a whole. The high
rates of growth were achieved despite price increases.
Once again, growth was driven above all by the stra-
tegic brands hohes C (volume sales +10 %), granini
(volume sales +19 %) and FruchtTiger. This success
was attributable in large measure to the expansion of
base business. Additional growth impulses came from
the introduction of new, innovative product concepts.
Highlights included the launch of hohes C Red Multi-
vitamin, which became one of the volume leaders in
the hohes C line within just a few months. This success
was confirmed by awards received from consumer
and trade organizations.
granini strengthened its position thanks to continued
strong growth in sales of juices and nectars in PET
bottles. Additional impulses were generated by the
refreshing granini Frucht Prickler carbonated beverage
line and the non-carbonated thirst-quencher range
Fruchtig-Frisch, which was expanded with the intro-
duction of the new Citrus-Mix variety.
The FruchtTiger brand attracted new consumers with
the successful presentation of the Sport Apple-Cit-
rus variety and the launch of the innovative Cubito
single-portion unit in a 0.2-litre carton with twist-off
cap and straw.
Investments in consumer communication were
increased again in 2006 in order to provide sustained
brand support. The most important measures included
TV advertising for hohes C Red Multivitamin, granini
Fruchtig-Frisch and FruchtTiger Sport.
In the out-of-home sector, sales support measures fo-
cused above all on the provision of dispenser systems,
glasses and advertising material. The most successful
products in this sector were the 0.2-litre table bottle
in typical granini design and the newly introduced
granini Cocktail Basics range.
Eckes-Granini Deutschland GmbH not only generated
decisive impulses in terms of products, sales and mar-
keting but also built its lead in the field of packaging
technology as well. As a logic consequence of the
pioneering decision taken several years ago to focus
mainly on one-way PET bottles, the second cold-asep-
tic bottling line in Germany was commissioned at
the Bröl facility in 2006.
Plans for 2007 call for development and further
expansion of the growing “chilled juices” and “fruity
thirst-quencher / refreshment” segments with granini
Sonnenfrisch and hohes C Naturelle, respectively.
| * retail food trade
31Germany
ECKES-GRANINI AUSTRIA GMBH: LEAD IN THE SYRUP MARKET MAINTAINED
| Austria |
Value-based market share*: 10.4 %
Strategic brands:
YO Syrup, hohes C, FruchtTiger
New products / important events:
hohes C Red Multivitamin, hohes C Mild
juices, YO Syrup Apple-Lemongrass,
light variation of Citron Iced Tea
Alliance with the German sister organization
While the syrup market recorded 3.2 % volume
growth, volume sales in Austrian market for fruit
beverages fell by 2.3 % in 2006*.
Eckes-Granini Austria GmbH grew volume sales by
6 % in 2006, although sales of branded products
lagged behind expectations. The company achieved
a value-based share of 10.4 %* in the fruit beverage
market, while maintaining its leadership in syrups with
a market share of 28.6 %*.
The hohes C range was extended through the ad-
dition of the successful Red Multivitamin and Mild
Juices concepts. The company achieved good results in
the syrup market with YO Syrup. Volume sales slipped
slightly, however, due to the effects of necessary price
adjustments. The YO Syrup line was supplemented
with two trendy flavour varieties: Apple-Lemongrass
and light variation Citron Iced Tea.
The alliance with the German sister company in mid-
2006 marked the beginning of major organizational
changes. The goals of these restructuring measures
are to synchronize and harmonize marketing and sales
activities in order to reach more effective synergies
through the implementation of joint measures.
| * retail food trade
32 Austria
| Austria | | Hungary |
SIÓ-ECKES KFT.: SIÓ GAINS STRENGTH AS THE NUMBER 1 BRAND
Value-based market share*: 24.7 %
Strategic brands: SIÓ, hohes C
New products / important events:
hohes C Red Multivitamin, hohes C Pineapple
Optimized packaging design for SIÓ,
Distribution partnership with Szentkirályi Water
(No. 1 in the Hungarian bottled water market)
The Hungarian market for fruit beverages recorded
slight volume growth (+1 %)* during the past
business year.
Business year 2006 progressed extraordinarily well for
SIÓ-Eckes Kft. The company increased volume sales
with sales of strategic brands (+3 %). Turnover in the
core business for fruit beverages rose by a substantial
11.7 %. Sales of bottled water under the distribution
partnership with Szentkirályi Water brought a marked
rise in total volume (+90 million litres). SIÓ-Eckes Kft.
is now the market leader in both sectors – fruit
beverages and bottled water. This partnership enabled
SIÓ-Eckes Kft. to achieve valuable synergy effects and
enlarged its sales strengths in the market considerably.
SIÓ continued to build its lead as the number one
brand in 2006. The unique positioning of SIÓ as a
fruit juice brand with strong regional roots was further
strengthened during the past year. A new TV advertis-
ing campaign and the optimized packaging design
contributed significantly to this success.
In the fruit juice segment, hohes C defended its
position in the face of increasing competition. The
international hohes C Red Multivitamin concept and
a 100% pineapple juice were successfully introduced
during the year.
Overall, business year 2006 was a year of consolida-
tion and the development of a sound basis for further
growth for SIÓ-Eckes Kft.. Key accomplishments
included retention of the market lead with a value-
based market share of 24.7 %* and the expansion of
activities to encompass bottled water operations.
The strategic brands – SIÓ and hohes C – will pro-
vide further innovative impulses in the Hungarian
market in 2007.
| * retail food trade
33Hungary
| Romania |
ECKES-GRANINI ROMANIA S.R.L.: ENTRY INTO A RAPIDLY GROWING MARKET
The Romanian market for fruit beverages is an at-
tractive growth market with strong potential. The
consumption of fruit beverages has doubled since
2000, and volume sales rose by 20 % in 2006 alone*.
In this situation, the Eckes-Granini Group took a major
strategic step into this promising market during the
past business year with the establishment of a fully-
owned subsidiary, Eckes-Granini Romania S.R.L..
Value-based market share: developing market
Strategic brands: granini
New products / important events:
Establishment of an Eckes-Granini subsidiary:
Eckes-Granini Romania S.R.L.
Introduction of a range of granini juices and
nectars in the retail food trade and the out-of-
home sector
As a strategic partner, Carlsrom Beverage Co.,
a highly successful brand supplier in the Romanian
beer market, has also been recruited. Carlsrom will
be responsible for the exclusive distribution of granini
products. The goal is to develop this premium brand
in the Romanian fruit beverage segment on the basis
of a long-term strategy.
The launch of a line of granini juices and nectars
in both the retail food trade and the out-of-home
sector was initiated in mid-2006 – supported by TV
commercials, numerous promotional activities and a
large-scale press campaign. Granini will be offered in
the innovative 1.0-litre PET bottle in its typical brand
design with an aroma-seal system. Granini will also be
available exclusively in the out-of-home sector in the
0.2-litre glass bottle.
Plans for 2007 call for continued expansion of the
product portfolio. Local production of granini at our
Romanian partner’s facility in 2007 will represent
another significant milestone.
| * retail food trade
34 Romania
| Romania |
35Russia
OOO ECKES-GRANINI RUS: VOLUME SALES DOUBLED WITH THE LOCAL USLADA BRAND
| Russia |
Value-based market share: developing market
Strategic brands: Uslada, granini
New products / important events:
Conversion of the Uslada brand to the new
Uslada for Soul concept
Partnership with Gutta extended on a
medium-term basis in early 2007
The Russian market continues to grow at double-digit
rates, driven primarily by the large segment of low
to medium-priced products. A strong general trend
toward consolidation is evident in the Russian
beverage industry.
OOO Eckes-Granini Rus recorded strong volume
growth of 66 % in the past business year, powered
above all by the doubling in volume sales of the
strategic local Uslada brand. This growth was achieved
through gains in distribution and optimization of the
product portfolio. A key measure was the success-
ful conversion of the local Uslada brand to the new
Uslada for Soul brand concept.
The company will continue to focus on the expansion
of sales and distribution in 2007, giving high priority
to boosting sales of 1.5 - and 2.0-litre family-size con-
tainers. Innovative line extensions will include several
new flavour varieties.
The partnership established with Gutta in Russia
several years ago was placed on a firm footing for the
medium term in 2007. Gutta and Eckes-Granini Rus
have agreed to cooperate closely in production and
sales, thereby enabling both companies to pursue
further strong volume sales growth more effectively.
| Spain |
ECKES-GRANINI IBéRICA S.A.: OUTPACING THE MARKET AGAIN
Value-based market share*: 10.3 %
Strategic brands: granini
New products / important events:
granini 1.5-litre PET range
Following a strong business year 2005, which wit-
nessed volume growth of 9 % in the retail food trade,
the Spanish fruit beverage market recorded moderate
gains (+3 %) during the past year. The still relatively
small chilled juices segment grew at a rate of 18 %,
while non-chilled fruit beverages, which account for
95 % of total market sales, gained by only 2 %.*
Eckes-Granini Ibérica S.A. achieved appreciable
growth again in 2006. Both turnover and volume sales
increased by 5 %. The company’s value-based market
share rose to 10.3 %, placing Eckes-Granini in the
number 2 position in the market*.
New granini products – including four varieties
introduced in the 1.5-litre PET bottle during the first
six months of 2006 – generated new volume sales
potentials for the brand. The launch was effectively
supported by the “Besos” (“Kisses”) TV and print
campaign based on the strengths of the granini
brand – pleasure and enjoyment of life. Image surveys
among Spanish consumers show year for year that
the granini brand has assumed a unique position
in the fruit juice market.
Eckes-Granini Ibérica S.A. anticipates further growth
in sales of convenient PET bottles as an increasing
number of consumers recognize the advantages of
this packaging form. The company also expects to
profit from rapid growth in the chilled fruit juices seg-
ment with the introduction of the new granini
al Sol in 2007.
| * retail food trade
36 Spain
| Spain |
37Switzerland
ECKES-GRANINI SUISSE S.A.: MARKET LEAD MAINTAINED
| Switzerland |
Value-based market share*: 10.6 %
Strategic brands: granini, hohes C
New products / important events:
hohes C Vital Orange-Exotic,
granini “Fruit of the year” Orange-Kiwi
Installation of the PET bottle coating system
in Henniez
A highlight in terms of production technology was
the installation of the new PET bottle coating system
at the Henniez facility. With this investment, the
company has further strengthened its position as the
technology leader in the industry.
Plans for 2007 foresee the introduction of granini
Frucht Prickler, a concept that has achieved consider-
able success in Germany. This measure is expected to
generate new potentials in the growing segment of
refreshing fruit beverages.
| * retail food trade
The Swiss market for fruit beverages stagnated during
the past business year. Furthermore, the Swiss trade
was affected by a major upheaval. The sale of the Pick
Pay supermarket chain to the Swiss discounter Den-
ner has resulted in further concentration in the retail
trade. Competition grew more intense at the same
time, thus exerting downward pressure on consumer
prices – following the entry of German discounters
(including Aldi) into the Swiss market.
Despite these difficult conditions, Eckes-Granini
Suisse S.A. maintained its market lead with a value-
based share of 10.6 %* and recorded 3.4 % growth in
volume sales.
Both the classic hohes C juice line and the hohes C
Vital wellness range, which established a strong foot-
hold in the market and was extended through the ad-
dition of a third variety – Orange-Exotic – performed
very well in 2006. Granini continues to hold its lead
both in the retail food trade and the out-of-home
sector. The successful “Fruit of the year” concept for
granini was supplemented by the Orange-Kiwi variety.
Both brands were promoted through TV advertising
and POS activities.
38 Key Business Figures
| Key Business Figures |
Profit and Loss Statement (in million EUR) 2005 2006
Volume in million Litres 896 1.067
Net Sales before excise taxes 718 818
Excise taxes -7 -6
Net Sales after excise taxes 712 812
Purchases -393 -480
Personnel Costs -73 -79
Depreciation -16 -13
Other Expenses -186 -202
Earnings before Interest and Taxes (EbIT) 43.6 37.0
EbIT margin 6.1 % 4.6 %
Balance Sheet (in million EUR) 2005 2006
Assets
Fixed Assets 166.4 176.4
Inventories 62.4 67.1
Accounts Receivable 91.2 101.1
Other Assets 34.5 30.7
Cash 2.7 5.4
Total Assets 357.3 380.7
Equity and Liabilities
Equity 93.9 101.0
Provisions 80.5 98.8
Liabilities 182.9 181.0
Total Equity and Liabilities 357.3 380.7
| Commentary |
Profit and loss statement
Eckes-Granini achieved gains in both volume sales and
turnover once again in 2006 in the wake of the record
year 2005. In the core business, the Group topped the
strong 6.4 % volume gain of 2005 with a rise of 9 %
for the past business year. Significant contributors to
this success were the extraordinary market perform-
ance of the German national organization and the
positive development of the Russian subsidiary.
Although earnings (EbIT) of EUR 37 million fell below
the 2005 figure, they were significantly higher than
expected. Despite the substantial rise in volume sales,
it was not possible to offset the significant price
increases for raw materials. Markedly higher media
investments in 2006 also had a negative impact on
earnings, as investments in consumer communication
in support of Eckes-Granini brands rose by 15 %.
Balance sheet
The partial group balance sheet total was EUR 23
million higher than in 2005. Fixed assets rose prima-
rily as a result of the acquisition of UAB Elmenhorster
in Lithuania and the commissioning of new PET
lines in Germany and France. This also resulted in an
increase in current operating assets.
Equity capital rose to EUR 101 million, and the capital
ratio of 27 % was slightly up over the previous year.
Net debt was reduced by EUR 18 million, however,
due primarily to a healthy cash flow. Thus both the
acquisition and investment in production lines were
offset by current operating cash flows.
39Commentary
| Eckes-Granini in the Internet |
Corporate Website:
www.eckes-granini.com
National Websites:
www.eckes-granini.at
www.eckes-granini.ch
www.eckes-granini.de
www.eckes-granini.es
www.eckes-granini.fi
www.eckes-granini.fr
www.eckes-granini.hu
www.eckes-granini.ru
www.egnordic.com
www.elmenhorster.lt
www.marli.ee
www.marli.fi
www.sioeckes.hu
40 Internet
Brand Websites:
www.fruchttiger.at
www.fruchttiger.de
www.granini.com
www.granini.at
www.granini.ch
www.granini.de
www.granini.es
www.granini.fi
www.granini.fr
www.granini.hu
www.granini.ru
www.hohes-c.com
www.hohes-c.at
www.hohes-c.ch
www.hohes-c.de
www.hohes-c.hu
www.joker.fr
www.marli.fi
www.mehukatti.com
www.rea.fr
www.sio-juice.hu
www.uslada.ru
www.yo-natur.at
www.yo-pur.at
www.yo-vital.at
Eckes & Stock Group
| Corporate Boards |
Advisory Board of Eckes-Granini GmbH & Co. KG (until November 30, 2006)
Peter Thiel Chairman
Hermann Arnold Deputy Chairman
Dr. Ottokarl Finsterwalder
Volker Stühmeier
Board of Supervisors of Eckes AG
Peter Thiel Chairman
Stefan Kobold Deputy Chairman
Dr. Karl Brings
Dr. Hans Falk-Bjerke
Axel Hamm
Bernard Huber
Management Board of the Eckes-Granini Group GmbH*
Thomas Hinderer Chairman
Sidney Coffeng Marketing, R&D, Export and PR
Heribert Gathof General Manager Eckes-Granini Germany
Albert Grätz Finance, Controlling, M&A
Sabine Holtkamp Human Resources, Organizational Development
Sylvain Jungfer General Manager Eckes-Granini France
Dr. Peter Nagel Supply Chain
* Eckes-Granini GmbH & Co. KG was formally reconstituted as the Eckes-Granini Group GmbH effective January 30, 2007.
All key figures for business year 2006 cited in the Annual Report relate to Eckes-Granini GmbH & Co. KG.
National organizations National organizations
Eckes AG
Eckes-Granini Group
Eckes-Granini Deutschland GmbH Nieder-Olm / Germany
Oy Marli AB Turku / Finland
Eckes-Granini France SNC Sarre-Union / France
Eckes-Granini Austria GmbH Kröllendorf / Austria
OOO Eckes-Granini Rus Moscow / Russia
Eckes-Granini Ibérica S. A. Barcelona / Spain 51 %
Eckes-Granini Suisse S. A. Henniez / Switzerland 51 %
SIÓ-Eckes Kft. Siófok / Hungary
Eckes-Granini Romania S.R.L. Bucharest / Romania
UAB Elmenhorster Vilnius Vilnius / Lithuania
100 % interest unless otherwise indicated.
| Key figures |
| National organizations |
2005 2006 Diff.
Volume sales in million litres 896 1,067 +19.2 %
– of which fruit beverages (core business) 896 978 +9.1 %
Net turnover in million EUR 718 818 +13.9 %
– of which fruit beverages (core business) 718 802 +11.7 %
Earnings before interest and taxes (Ebit) in million EUR 43.6 37.0 -15.2 %
Employees* 1,487 1,457
* Full-time equivalent
Publisher
Eckes-Granini Group GmbH*
| * Eckes-Granini GmbH & Co. KG was formally reconstituted as the
Eckes-Granini Group GmbH effective January 30, 2007.
All key figures for business year 2006 cited in the Annual Report
relate to Eckes-Granini GmbH & Co. KG.
Main Office
Ludwig-Eckes-Allee 6
55268 Nieder-Olm, Germany
Telephone: +49 (0) 61 36 / 35 05
Telefax: +49 (0) 61 36 / 35 10 81
E-mail: [email protected]
Contact
Engel & Zimmermann AG,
Agentur für Wirtschaftskommunikation, Gauting
Telephone: +49 (0) 89 / 89 35 63-3
Telefax: +49 (0) 89 / 89 39 84 29
E-mail: [email protected]
Concept
Engel & Zimmermann AG,
Agentur für Wirtschaftskommunikation, Gauting
Design und Realisation
Welcome Marketing GmbH, Schondorf am Ammersee
Photo Credits
Eckes-Granini Archive
Jan Greune, Münsing
Karl Newedel
Getty Images
This Annual Report is also available in German.
Dieser Geschäftsbericht ist ebenfalls in deutsch erhältlich.
.
| Publishing Data |
| VISION |
Eckes-Gran
ini G
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RT 2006
| Brand quality that bears fruit | ANNUAL REPORT 2006
Leading European fruit juice and fruit beverage
company, based on strong Number 1 / Number 2
brands, with an excellent reputation for
successful innovations.
Profitable and sustainable growth, via organic
growth and acquisitions, mainly in Europe.
With a motivated and competent team in a very
attractive company characterized by an open
and entrepreneurial culture.
Leading European fruit juice and fruit beverage
company, based on strong Number 1 / Number 2
brands, with an excellent reputation for
successful innovations.
Profitable and sustainable growth, via organic
growth and acquisitions, mainly in Europe.
With a motivated and competent team in a very
attractive company characterized by an open
and entrepreneurial culture.